Universal Health Care in the US. Yea or Nea?

[Francesca R]

An excellent point, and one which I hadn't heard put in precisely those terms before. Thanks.

Ha. There is (much) more if you want.

http://www.nber.org/papers/w6107

Adverse Selection in Health Insurance
Individual choice over health insurance policies may result in risk-based sorting across plans. Such adverse selection induces three types of losses: efficiency losses from individuals being allocated to the wrong plans; risk sharing losses since premium variability is increased; and losses from insurers distorting their policies to improve their mix of insureds. [ . . . ]

http://ideas.repec.org/p/wbk/wbrwps/2574.html

How adverse selection affects the health insurance market
Adverse selection can be defined as strategic behavior by the more informed partner in a contract against the interest of the less informed partner(s). In the health insurance field, this manifests itself through healthy people choosing managed care and less healthy people choosing more generous plans. [ . . . ] The government can correct spontaneous market dynamics in the health insurance market by directly subsidizing insurance or through regulation [ . . . ]

http://www.actuary.org/pdf/health/pools_sep06.pdf

http://jhppl.dukejournals.org/cgi/content/abstract/18/3/657

Government bulk-buying a la NHS is not the only solution to selection bias, and several others have been studied and reported on in some of the above links. But nobody on this thread has mentioned anything approaching any of those, so they are, so far at least, beyond the scope of this (rinse and repeat) discussion.

 

[Francesca R]

As a citizen she can get a job that will provide us coverage but with the economy the way it is I worry about her being laid off and us ending up with no insurance.

This is related to the same thing. Threshold insurance cover provided as standard through an employment contract is a localised proxy for universal health care--just universal to the boundary of the company's payroll and no further.

I think (please correct me if wrong) that employment provided health cover is not "opt-in". Is it easy to opt-out and buy your own off the shelf, or are there hurdles to clear?

Assuming not, it is not really fully voluntary private health insurance. And one of the major reasons why the overwhelming majority of US private cover is employer-arranged is--I suggest--is to deal with adverse selection.

However, I also assume that the die-hards of voluntary private cover are opposed to employer-provision. They should be, particularly in small firms. After all, they are subsidising Mary who weighs 250lbs, smokes 40 a day and has three twinkies before breakfast.

 

[Rolfe]

Francesca's post is indeed an excellent point, but it wasn't quite the one I was making myself. I was actually addressing the point made by an earlier poster concerning his reluctance to contribute towards the treatment of self-inflicted illness. Liver disease due to alcohol abuse, diabetes due to obesity, that sort of thing.

I was pointing out that if "you" (that is, as a society) wish not to pay for treatment of this sort of condition, but instead to let sufferers die, then that is actually much easier to accomplish in a universal system.

Insurance that excludes cover for that type of disease is possible, I assume, but I can't say I've come across it. So if you're paying into an insurance policy, the chances are that your contributions are funding exactly that. And there's probably bugger-all you can do about it. (There's a thought. Do such insurance schemes exist? And if they do, are those who are so opposed to paying for the self-inflicted woes of others make sure that their policy is of this type? If not, then this is all hollow rhetoric.)

On the other hand, a publicly-funded system can make such decisions, as a point of policy. Politicians can (and do) stand for election on the basis of making the NHS more efficient and accountable, and if they thought there were votes in it, then denying insulin to obese people who develop type II diabetes would be right there in the manifesto. Fortunately, they don't, because there are few votes in it. There's no widespread desire here to punish people for their mistakes to that extent. But it would certainly be doable, if the majority was in favour.

So, once again, it's the universal system that is actually more capable of giving the critics what they want, and when we examine how the present US system operates, it seems likely that it is currently doing exactly what these critics don't want.

Rolfe.

ETA. What Francesca said, again.

However, I also assume that the die-hards of voluntary private cover are opposed to employer-provision. They should be, particularly in small firms. After all, they are subsidising Mary who weighs 250lbs, smokes 40 a day and has three twinkies before breakfast.

 

[Porkpie Hat]

This is related to the same thing. Threshold insurance cover provided as standard through an employment contract is a localised proxy for universal health care--just universal to the boundary of the company's payroll and no further.

I think (please correct me if wrong) that employment provided health cover is not "opt-in". Is it easy to opt-out and buy your own off the shelf, or are there hurdles to clear?

Assuming not, it is not really fully voluntary private health insurance. And one of the major reasons why the overwhelming majority of US private cover is employer-arranged is--I suggest--is to deal with adverse selection.

However, I also assume that the die-hards of voluntary private cover are opposed to employer-provision. They should be, particularly in small firms. After all, they are subsidising Mary who weighs 250lbs, smokes 40 a day and has three twinkies before breakfast.

I believe you're correct about the option to "opt in/out" but the problem for us is trying to get coverage on our own with pre-existing conditions.

I'm asthmatic and take blood pressure meds, my wife is on anti-depressants. Niether one of us smoke or lead any kind of high risk life styles yet can't find a policy that isn't cost prohibative.

I'm glad we have the option of staying put (in Canada) where this isn't an issue.

 

[oggiesnr]

Hypothetically- How would this scenario play out in a Gubment Health Care System?

There is only one doctor doing a certain increasing-in-demand back surgery, the government has placed price controls on the surgery, the doctor can not make as much money as he would have in a free market of health care. In a free market of health care, wouldn't the demand for the surgery, drive up the price, thus attracting new doctors to the new method/procedure, increasing the supply and thus lowering the price?

I am lucky that my local GP practice (NHS) is very good and very popular. So as allowed by the system the practice has moved into new, purpose built premises with more treatment rooms and facilities, taken on more staff (Doctor's, nurses and support staff) and is now seeing more patients than before and being paid accordingly. As I see it this is exactly how the practice would behave in a market situation so what's the problem? The good news is I don't have to prove I'm insured or sign a cheque every time I go. I should also point out that (as in all good markets) I was able to change my GP practice because I was not happy with the my previous one (not the medical care but issues round making appointments and the like). Interestingly I understand that that practice is now making changes to the way it works to stem the of the loss of income from people leaving.

The NHS is a lot more dynamic, market and patient centred than the stereotype of "Universal Health Care" that seems to be the mythical prototype for so many of the objections in this thread.

Steve

 

[Francesca R]

I believe you're correct about the option to "opt in/out" but the problem for us is trying to get coverage on our own with pre-existing conditions.

I'm asthmatic and take blood pressure meds, my wife is on anti-depressants. Niether one of us smoke or lead any kind of high risk life styles yet can't find a policy that isn't cost prohibative.

Extensive exclusions can also be explained by the need to avoid the exact same moral hazard. People interpret it cynically ("Those bastards only want to cover you for stuff you won't get") but it is more that it is not worth your while for them to cover you for something that you are likely to get because the cost of that is not too different from paying up at the time.

Aside from libertopians, the vast majority of mainstream economists and public policy scientists recognise adverse selection in private markets as "market failure"--a correctly priced market for health insurance (costing the amount that equals the true present-value health risk of the population) can not exist when participation is fully voluntary. Some guy (George Akerlof) won a Nobel award for work on it. To them (and me), ignoring that and pushing free-markets in the face is denial of a high order.

 

[volatile]

So if you're paying into an insurance policy, the chances are that your contributions are funding exactly that. And there's probably bugger-all you can do about it.

A further excellent point. Doubtless there are innumerable people paying into the same private insurance pot as Dan is who are smokers, drinkers and gabouts, and who receive a greater benefit than they contribute and increase Dan's premiums to boot - such is the nature of insurance. Another fine example of the private system being a great example of a lot of the things its very proponents are concerned about.

So Dan. Are you willing to change your mind?

 

[ponderingturtle]

It's also terrible that so many USA folk seem to be unaware of the facts and have a view of their health system which is objectively wrong, never mind the ignorance they have of other health systems. (This is based on what I have seen in discussions on this Forum in which the same myths are brought up time and time again.)

Well if you look at the Veterans Administration you can also come to the conclusion that americans might be uniquely bad at running a health care system.

Maybe we should outsource that.

 

[Rolfe]

I believe you're correct about the option to "opt in/out" but the problem for us is trying to get coverage on our own with pre-existing conditions.

I'm asthmatic and take blood pressure meds, my wife is on anti-depressants. Niether one of us smoke or lead any kind of high risk life styles yet can't find a policy that isn't cost prohibative.

I'm glad we have the option of staying put (in Canada) where this isn't an issue.

The USA is a nice place, but right at the top of all the reasons why I'm eternally thankful I don't live there, and would never consider moving there, is the healthcare issue.

Funnily enough, one of my American friends is chronically ill. The poor girl has lupus. She struggled on at work when she really wasn't well enough to do it, partly because she loved her work, but partly because she was afraid of losing her job and her insurance cover if she was off sick. From my point of view, it was pitiful to see. Someone who really needed time to get over flare-ups of the condition, and to recover from some of the chemotherapy treatments she was on, struggling in to work for fear of losing her healthcare entitlement.

And yet, she had nothing but praise for this system. She was genuinely, heartily grateful that she lived in the USA. Why? Because she was convinced that the expensive drugs she was getting were not available in other countries - only in America!

She was wrong. If she'd lived in Britain, she would have got just the same treatment. Without having to pay one extra penny (on top of her taxes) for it. And she would have been permitted to take the time she needed off work, without penalty.

But how could I, or the other Brit people in that social group, possibly tell her that? It would have been too cruel. Her belief that she lived in the best society and that she was getting treatment she couldn't access anywhere else, was one of the things that kept her going. But it was just one more instructive reminder of the misconceptions that so many Americans labour under with regard to the merits of their system.

Rolfe.

 

[Darat]

...snip... but it is more that it is not worth your while for them to cover you for something that you are likely to get because the cost of that is not too different from paying up at the time.

...snip....

Probably just me but could you reword that as I've read it about a half a dozen times and still don't understand it.

 

[Francesca R]

Insuring for deterioration of an existing condition costs more. Suppose the probability based on medical stats is 50% that you will need treatment in the next three years. Then insurance will cost about one third per annum of the cost of the treatment itself. I think most people would not bother to pay this and would roll the dice instead. Hence it does not get offered in the first place, and the world looks like a hostile place where "you're on your own" if you have an existing condition.

 

[Darat]

Thanks.

 

[Rolfe]

I say no. It isn't my responsibility to pay for health care for people who don't eat healthy foods. Look at the obesity epidemic in america that is caused by eating mcdonalds for breakfast lunch and dinner. I know many people who drink too much beer. I mean, this one girl needs to have 8 before she even feels drunk. Now if she gets liver problems, let her pay. It may sound cruel, but paying for irresponsible behavior only causes more of it. [.... snipped rest of self-righteous rant ....]

And how often do we hear this one. I'm all right Jack, and it's not my responsibility to pay for my neighbour's problems. People need to man/woman up and pay their own way. And so on.

Hard. Unsympathetic. Unempathic, indeed. Individualism at its most extreme, the attitude that I'll take care of myself and be beholden to nobody, and everybody else had better do likewise. Is it part of the pioneering spirit?

I don't think so. I think (correct me if I'm wrong) that the pioneers were pretty good at helping their neighbours and looking out for each other. And today, well, to set beside these rants, I have to say that Americans are among the most warm-hearted, generous and charitable people I know. There is a tradition of charitable contribution which is truly admirable. Most of the really eye-popping acts of public philanthropy have been perpetrated by Americans.

The sticking point seems to be the element of compulsion. People who contribute generously to charity will nevertheless have a complete hissy fit at the suggestion that instead, the money be deducted as tax and used for the same purpose.

That's communism!

Oh, get over it! On the other side of that coin, hear the rant from the exploited philanthropist. Why should it be left to me and others like me to bear the whole burden of feeding the poor/providing healthcare to the indigent/building the new town hall? Joe Bloggs has just as much money as me, but the tight-fisted miser won't part with a penny he doesn't have to. It's not fair!

Too damn right it's not fair. Voluntary charitable contributions from the wealthy could support the system even 100 years ago, when social pressures (noblesse oblige, and all that) could usually be counted on to see that most of the wealthy did their bit. Not now, I fear. Too easy to be a Joe Bloggs, and just hang on to the stuff. While you, or at least your family and employees, take advantage of the philanthropy of others.

Hence this peculiar, commie notion of taxes. Because it's fair. Sure, you lose that lovely philanthropic glow you get when you donate money (or goods or time) on a voluntary basis, and instead you get a mean-spirited resentment of the compulsion. Or at least you do if you haven't thought it through. But it's fair, and it works.

Get over it.

Rolfe.

 

[DaN K. StAnLeY]

I say fix our system and stay away from socializm. I don't like the idea of uni-health because it doesn't encourage people to be personally responsible for their own lives. If someone needs help and can't afford it, other charitable people/companies/churches can help out voluntarily. This is easier to do if we cut back on wasteful spending and make HC more affordable to everyone.

I understand people from EU wanting us to adopted their way, but not everyone is so quick to give up and just accept laziness. It seems like the uni-health argument promotes laziness in people. I'm sure if we can go to the moon, we can find a better way to make HC cheaper than just giving it away.

I'll just have my cake and eat it too, for now.

 

[Drewbot]

Well if you look at the Veterans Administration you can also come to the conclusion that americans might be uniquely bad at running a health care system.

Maybe we should outsource that.

I might come to the conslusion that GOVERNMENT might be bad at running a health care system.

and a mortgage company

and a social security agency

 

[DaN K. StAnLeY]

People need to man/woman up and pay their own way. And so on

Who said that??? I think I said man/woman need to take better care of themselves (if I didn't thats what I meant).

 

[Lonewulf]

I say fix our system and stay away from socializm.

I think we got that by now.

I don't like the idea of uni-health because it doesn't encourage people to be personally responsible for their own lives.

Yet, the current system isn't doing a great job as it is, and it's about as free market as it gets.

I understand people from EU wanting us to adopted their way,

And there are many people that are citizens of the U.S., including me, that want to adopt their way.

 

[Lonewulf]

Who said that??? I think I said man/woman need to take better care of themselves (if I didn't thats what I meant).

And if they don't, let 'em starve. That is, essentially, what you're defending, whether you know it or not. I'm not sure how you can "fix the system" while rejecting this premise.

 

[DaN K. StAnLeY]

Individualism at its most extreme, the attitude that I'll take care of myself and be beholden to nobody, and everybody else had better do likewise

Why is that a bad thing. If someone doesn't want help or need it, whats it to you?

I don't think so. I think (correct me if I'm wrong) that the pioneers were pretty good at helping their neighbours and looking out for each other. And today, well, to set beside these rants, I have to say that Americans are among the most warm-hearted, generous and charitable people I know. There is a tradition of charitable contribution which is truly admirable. Most of the really eye-popping acts of public philanthropy have been perpetrated by Americans.

Yes, they gave the money voluntarily. They weren't forced to do it. Thats whats great abouot America. If you want to contribute to a common cause you can. If you don't want to, that's fine too.

 

[DaN K. StAnLeY]

And if they don't, let 'em starve.

Not what I'm saying at all. Why is that the only other option for you.?